Myth #9: Buying new property is better than buying old property

Newly built or off-the-plan properties are appealing and can give you many benefits as a property investor including securing the property at today's prices and maximising the available depreciation which can help you save tax.

But there are risks however which you need to be aware of, including a falling property market between you paying the initial deposit and settling in the future. And when buying off-the-plan you will not know exactly how the property will look when construction is complete. Sometimes, unscrupulous developers can vanish with your deposit, and they may even abandon the project. That is why I always advice that you do your research on the company, the title documents, and their track record in delivering past projects. Past performance is not a guarantee but an indicator of the company’s ability to deliver.

(There are certain steps to follow which will help you pick the right off-plan properties to invest in which will be discussed in future episodes)

Myth #10: Purchasing below market value guarantees profit

It depends on how the market value was defined at the time and that value may not hold up in the future. For example, if the property is purchased below market value at the height of the boom it can still be a poor investment in the short term if the property cycle shifts into a decline and your property drops in value.

During a booming market, it will generally be more difficult to achieve higher discounts because of the number of buyers in the market and the high levels of demand.

Conversely, during a bust market, there will tend to be less buyers and an abundance of properties for sale, so it can be easier to achieve larger discounts.

Myth #11: Inflation and Naira Devaluation makes RE investing in Nigeria a waste of time

Nigeria can be a tricky place to do business or invest in. That’s a fact. But every emerging market has its challenges. And emerging markets give the highest ROI’s because they are emerging opportunities for wealth creation. There is huge potential to earn a good return on your investment if you get your investment strategy right. What you need to do prior to investing is get the right guidance and make sure you do your research.

I’m going to read snippets from an article by Victor Gbonegun writing for The Guardian Newspaper in December 2021, where he cited a new report by Octo5 Holdings limited which is a real estate firm based in Lagos. The report has revealed that the fundamentals of the Nigerian economy remain good for real estate investment despite increased insecurity and lack of effective management of fiscal systems. The report, looked at how inflation, naira devaluation and high exchange rate has impacted the real estate sector and concluded that real estate investments remain the most effective hedge against devaluation of naira on personal income and wealth.

The report further states that volatility in the foreign exchange regime means that with smaller dollar sums, you can buy significant assets below value, especially in the middle market sector with massive unmet demand. Inflation increased by 4.23% between May 20 and October 21, 2021, while the value of a two-bedroom apartment in Heron’s Beak, a real estate project increased by 80 per cent during the same period.”

According to the report, investors can take advantage of foreign exchange fluctuations to invest with a long-term focus in assets around the Lagos and Abuja axes.

Chief Executive Officer, Octo5 Holdings Limited, Mr. Jide Odusolu, said true economic freedom comes from making smart investment decisions and real estate investment could help more Nigerians unlock wealth creation. Citing its soon-to-be completed Heron’s Beak apartments as an example, he said early investors who had